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Remarks at Workforce Skills Development at German Ambassador's Residence

Tuesday, January 29, 2013

Deputy Secretary of Commerce Rebecca Blank
Remarks at Workforce Skills Development at German Ambassador's Residence 

Thank you, Ambassador Ammon.  It’s exciting to hear about the Skills Initiative, and I look forward to finding ways to work together to advance this agenda. Good evening, everyone.  It’s a pleasure to be here with a group that is committed to strengthening U.S.-German business relations and building even stronger connections between our peoples.

It’s clear that the U.S. and Germany are growing together as economic allies.

  • The two-way trade of goods between the U.S. and Germany appears to have hit a new record in 2012
  • Both nations are experiencing relatively stable economic growth that is expected to continue this year and accelerate in 2014
  • And every day, hundreds of thousands of Americans wake up and go to work in German companies – and the reverse is also true.

I’ve said many times that the long-term competitiveness of the U.S. economy will depend upon two primary factors–a skilled workforce and our ability to stay on the cutting edge of innovation and invention.The same is true for Germany.  So it’s appropriate for us to discuss how the German model for skills training could help strengthen our workforce here in the U.S.

As an economist, when I talk about the role that the Federal government should play in the U.S. economy, I often highlight the crucial role of “public goods.”

Education and training are classic public goods that help ensure a vibrant and powerful workforce.

Education helps not only the worker who receives those skills, but the broader society benefits from having a deeper pool of talented and skilled citizens.  
For this reason, education must be (at least in part) the responsibility of the public sector.  But at the same time, educational models–particularly for post-high-school students – should be built in close partnership with the private sector which will hire these students and graduates.

The U.S. has led the world in its investments in education.  In the early 1800s, we were the first nation to create free and public elementary schools.  A century later, we led the world in building free and universally-available high schools.

Since the 1860s, the U.S. has pioneered the public university as a place that provides liberal arts education and that also applies that learning to the “real world” through schools of engineering, law, business, and public health.  And–important to today’s discussion–in the past four decades, we have built a system of over 1,300 public community colleges designed for high school graduates who may not want–or be ready for–a four-year university degree.

Today, President Obama is committed to maintaining and strengthening these investments in partnership with state and local governments.

But while the U.S. has served as a model for how to build public education, we continue to have our challenges.  While our University and graduate training programs are world class, we have not always done as well in serving students who are not going into four-year degree programs–students who are more interested in technical and apprenticeship training.

Germany has excelled in this area, and we would like to learn from the ideas and best practices that have flourished there. In particular, Germany’s dual system of vocational training has captured the attention of many nations. There are clear benefits of blending continued classroom education alongside hands-on experience.  Germany has proven this approach to be a cost-effective way to strengthen its manufacturing base, to bolster its competitiveness, and to help its economy maintain traction–while also providing clear paths to good jobs for high school graduates.

For these reasons alone, it would be smart for the U.S. to learn more about the dual system. . .

But there is another, timely reason for the U.S. to examine our workforce development efforts: the U.S. is well positioned to attract major business investments in the coming years.

Due to our strong consumer base, our increasingly low and stable energy costs, our robust entrepreneurial spirit, and other factors–large companies from Germany and elsewhere are initiating and expanding investments on U.S. soil. This trend is also extending to mid-sized “Mittelstand” businesses looking to grow through international expansion.

Already, Germany is the third-largest source of foreign direct investment into the U.S., with over $200 billion invested here in industries ranging from chemicals to transportation equipment and more. We welcome this trend and hope to build on this momentum. And we understand that one very important factor for German firms looking to invest here is whether they will be able to find a pool of well-trained workers with the right skills.

So how can we meet this need–bringing more growth and prosperity to both nations?

Germany’s new Skills Initiative is part of the answer to that question. 

I want to commend the Embassy for bringing together German companies doing business in the U.S. with local training providers, community colleges, and state and local government leaders. You held a conversation with this mix of stakeholders just last month in Ohio. And I’m pleased that you have more of these events planned in several states and cities this year.

I want to state clearly that the Commerce Department stands ready to serve as an active partner in this and other efforts under the Skills Initiative.

After all, we all want to find the answers to some tough questions:

  • How can we work more closely with German businesses–and U.S. businesses for that matter–to assure a stable pipeline of well-trained workers for manufacturing jobs across America that we need to fill now or in the near future?
  • How can we more closely align curricula and certification programs between Germany and the U.S.?
  • And, especially for young people here in the U.S.: How can we raise awareness that today’s manufacturing jobs are exciting, challenging, and rewarding–and that they should consider careers in this growing sector?

The good news is, we are not starting from scratch in our efforts to answer those questions. The Obama administration has made strong commitments to improving educational quality, strengthening access to education and training, and building an overall framework in which our workforce can succeed. I’d like to highlight a few key efforts that we’ve made to ensure that our workforce is ready for the jobs of the 21st century.

First, over the past two years, the administration has invested a total of $1 billion in Community College and Career Training grants.  This money is targeted at efforts to prepare workers for high-wage, high-skill jobs in two years or less.

So far, nearly 500 community colleges have received these grants either on their own or as part of a larger consortium.  Importantly, local manufacturers are sometimes involved in helping these colleges design their curricula.  Companies also provide equipment, instructors, internship programs, and often make commitments to hire graduates.

The Department of Labor will fund two more years of this program, spending another billion dollars. The next round of funding will be announced soon.  The Administration has a growing interest in exploring how we can encourage more businesses to take a formal and robust role as partners in this effort–such as through work-based training.

This may be a place where more German companies can be involved. 

And, before I move on, I should note that it’s not just the federal government making these connections between community colleges and businesses. For example, the Aspen Institute–represented here today–is leading Skills for America’s Future, an initiative strongly supported by the president.

A second example of where the administration is playing a more active role in workforce development is through the National Network for Manufacturing Innovation–led by the Commerce Department. This is a billion-dollar proposal to create up to 15 institutes around the U.S.  We based this proposal – in part – on models such as the Fraunhofer Research Institutes in Germany.

These new institutes will marshal all of the players, assets and resources in a particular U.S. region to focus on a particular technology or process related to manufacturing. Our goal is to speed tech transfer and innovation, helping each region become world-renowned for its unique industrial strength.

Our pilot institute launched last summer in the region where Ohio, Pennsylvania and West Virginia meet. The pilot is focused on the fast-growing field of 3D printing–also known as additive manufacturing. The coalition for the pilot includes nine universities, five community colleges, and 40 companies.

An important aspect of NNMI–crucial to its long-term success–is to create stronger pathways from 2- and 4-year colleges to good jobs. We want to build workforce skills at multiple levels to help strengthen business capabilities across both small and large companies.

That’s why the NNMI’s workforce training goals are guided by the National Science Foundation’s Advanced Technological Education program. This program already has dozens of training centers in place across the country. It will link those centers with the NNMI institutes. For example, it will help students who need financial help to travel to the institute to get hands-on, high-tech training with the latest equipment. In addition, the program is looking to reach young people early on by involving high school teachers in technology classrooms.

We know that other countries have already made investments similar to NNMI in order to compete globally and attract foreign investment.  So, we in the U.S. must continue to push Congress to fully authorize and fund this important Network as soon as possible.

A third example of the administration’s support for workforce development is its policies to support educational access for students after they finish high school. Higher education costs have skyrocketed in recent years, but the Administration has worked diligently to ensure that degrees and credentials remain within reach.  
For example, we doubled our investments in Pell Grants, which provide assistance to lower-income students. . . We expanded education tax credits. . .And we are helping students manage their loans and keep their interest rates low.

And, even in a time of tight budgets, the president has proposed increases in funding for programs that support STEM education. I should note that this is yet another area where we look to Germany where about 25 percent of college graduates get STEM degrees, compared to about 13 percent here in the U.S. Clearly, we can work together and learn from each other in this area as well.

With all of these efforts already underway, and with the Skills Initiative now being launched, it is clear that the moment for us to collaborate more closely on workforce development is now.

Before I close–I want to particularly recognize the private sector leaders who are here today. It is wonderful to see your companies making significant investments in American workers–from the Volkswagen Academy at Chattanooga State. . . to Siemens’ well-known partnership with Central Piedmont Community College in Charlotte… to BMW in Spartanburg and more.  

In fact, just a few months ago, I visited the STIHL chainsaw factory in Virginia Beach. They cited the skills of the local workforce – especially the presence of U.S. veterans – in their decision to expand their U.S. factory and create 50 more jobs.

Looking forward, the president and I hope that even more German companies of all sizes see the potential of American workers as a reason to invest here.  And yes, I believe the reverse will also remain true–U.S. companies will continue to see that same potential for growth through their ongoing investments in Germany.
So let us continue to foster goodwill and prosperity in our ever-growing relationship.

Now is our moment to lead together in the global economy–and it is wonderfully fitting that our hardworking citizens themselves are perhaps the central reason we are finding success as we move forward.

Thank you.